Lifeline or Last Resort for Struggling Firms?

Notably, the crypto treasury trend is also fueling skepticism that struggling firms may be using digital assets as a reputational lifeline. Foy acknowledged that the temptation exists for firms under pressure.

Last month, biotech firm Windtree Therapeutics disclosed a $60 million purchase agreement with Build and Build Corp. to begin its BNB treasury plan, followed by a $500 million equity line of credit and a $20 million stock-purchase pact to expand its holdings.

The company briefly enjoyed a boost in mid-July when it announced the BNB treasury strategy, but shares have since fallen more than 90% from their peak.

On Tuesday, Nasdaq announced the biotech firm would be delisted for failing to maintain the $1.00 minimum bid price required under Listing Rule 5550(a)(2).

Foy suggested examining their behavior to spot firms using crypto treasury for short-term optics. He advised checking managements risk expertise, leverage levels, focus on core business and insider share sales.

“If any of these seem strange or out of the ordinary, then this is possibly a sign that this isnt a long term plan but rather a short term share price play,” he said.

Firms test Ether, altcoins in treasuries

While Bitcoin remains the dominant choice for treasuries, firms are beginning to experiment with Ether (ETH) and selected altcoins. The difference, according to Foy, lies in the potential for staking rewards and new collaboration opportunities with blockchain foundations.

Last month, Ray Youssef, CEO of NoOnes, said Ethereums hybrid appeal is drawing treasury managers. “Ethereum starts to look like a hybrid between tech equity and digital currency. This appeals to treasury strategists looking beyond passive storage,” he said.

Youssef said ETHs staking yield, programmability and compliance-friendly roadmap have made the cryptocurrency appealing to “forward-looking companies, especially those already involved in the digital economy.”